Perhaps the most far-reaching regulatory change affecting net worth was the liberal- ization of the accounting rules for supervisory goodwill. 19 Effective in July 1982, the Bank Board eliminated the existing ten-year amortization restriction on goodwill, thereby allow- ing S&Ls to use the general GAAP standard of no more than 40 years in effect at the time. This change was intended to encourage healthy S&Ls to take over insolvent institutions, whose liabilities far exceeded the market value of their assets, without the FSLIC s having to compensate the acquirer for the entire negative net worth of the insolvent institution. 20 Not surprisingly, between June 1982 and December 1983 goodwill rose from.
